Individuals watch from a bridge as flames from an Israeli assault rise from Sharan Oil depot, following Israeli strikes on Iran, in Tehran, Iran, June 15, 2025.
Majid Asgaripour | Through Reuters
Oil futures jumped greater than 2% at first of the primary buying and selling session because the U.S. launched direct assaults in opposition to Iran, casting a shadow over the provision outlook within the embattled oil-rich Center Jap area.
U.S. crude oil on Sunday night rose $1.76, or 2.38%, to $75.60 per barrel, whereas international benchmark Brent was up $1.80, or 2.34%, to $78.81 per barrel. Brent had jumped 5.7% to crack $81 earlier than easing.
President Donald Trump on Saturday stunned markets with the announcement that Washington had straight entered the Iran-Israel battle, launching assaults in opposition to three Iranian nuclear websites in Fordo, Natanz and Isfahan.
Buyers at the moment are seeking to see how Iran will reply to the unprecedented U.S. strikes. Iran’s overseas minister mentioned Sunday the Islamic Republic reserves “all choices” to defend its sovereignty. The preliminary rise in oil costs might ease if Iran doesn’t reply, in accordance with S&P World Platts.
Strait of Hormuz
The worst-case state of affairs for the oil market could be an try by Iran to shut the Strait of Hormuz, in accordance with power analysts. Some 20 million barrels per day of crude, or 20% of worldwide consumption, flowed via the strait in 2024, in accordance with the Vitality Info Administration.
Iranian state media reported that Iran’s parliament had backed closing of the strait, citing a senior lawmaker. Nevertheless, the ultimate choice to shut the strait lies with Iran’s nationwide safety council, in accordance with the report.
U.S. Secretary of State Marco Rubio has warned Iran in opposition to making an attempt to shut the strait. It could be “financial suicide” for the Islamic Republic as a result of their exports go via the waterway, Rubio mentioned.
“We retain choices to take care of that,” Rubio advised Fox Information in an interview Sunday. “It could damage different international locations’ economies lots worse than ours. It could be, I believe, a large escalation that might advantage a response, not simply by us, however from others.”
Iran produced 3.3 million bpd in Might, in accordance with OPEC’s month-to-month oil market report launched in June, which cites impartial analyst sources. It exported 1.84 million bpd final month, with the overwhelming majority bought to China, in accordance with information from Kpler.
Rubio referred to as on China to make use of its affect to forestall Tehran from closing the strait. About half of China’s waterborne crude oil imports comes from the Persian Gulf, per Kpler.
“I encourage the Chinese language authorities in Beijing to name them about that, as a result of they closely depend upon the Straits of Hormuz for his or her oil,” Rubio mentioned.
Buyers are additionally watching the chances of an additional destabilization of the Iranian regime on account of U.S.-Israeli hostilities, given the instance of the long-spanning influence that the 2011 NATO-led ousting of Muammar Gaddafi had on Libya’s provides.
Regional tensions
Tensions have likewise ramped up in neighboring Iraq, OPEC’s second-largest producer, the place pro-Tehran militias have beforehand threatened Washington, ought to it goal Iran’s supreme chief, Ayatollah Ali Khamenei.
On Sunday, Iran’s Revolutionary Guard warned that “the US bases within the area should not their power however quite their best vulnerability” with out specifying explicit websites, in accordance with Google-translated feedback carried by Iranian information company Fars.
Fledgling, however revived diplomatic ties between former rivals Iran and Saudi Arabia might in the meantime diffuse the opportunity of disruptions within the provide of the world’s largest crude exporter.
“The Kingdom of Saudi Arabia is following with deep concern the developments within the Islamic Republic of Iran, significantly the focusing on of Iranian nuclear services by america of America,” the Saudi overseas ministry mentioned on Sunday. Riyadh, a detailed U.S. ally within the Center East, has restricted its involvement within the Iran-Israel offensives.
Again in 2019 — 4 years earlier than resuming diplomatic relations with Iran — Saudi Arabia’s oil set up services at Abqaiq and Khurais sustained harm throughout assaults that had been claimed by the Houthis, however for which Riyadh and the U.S. mentioned Iran bore duty. Tehran denied involvement.
On the resumption of Israeli-Iranian hearth final week, the Worldwide Vitality Company’s chief Fatih Birol mentioned the establishment was monitoring the developments and that “markets are properly equipped at the moment however we’re able to act if wanted,” with 1.2 billion barrels of emergency shares on standby.
